Was Big Local good value for money?

The Big Local programme’s effectiveness has been measured in different ways, including its impact on community power and resident-led decision-making. These different lenses and studies have contributed to a rich and layered understanding of community-led change. Another way to understand the effect of Big Local is by looking at its return on investment: whether giving communities control over funding represents value for money.

Local Trust has explored the impact of Big Local on community power and how it enabled resident-led decision-making in other articles. 

To answer the value for money question, the Communities in Control study incorporated a cost-benefit analysis in their independent evaluation of the Big Local programme (funded by the National Institute for Health and Care Research). Reflecting the study’s overall focus, the researchers looked particularly at the health benefits of Big Local against the costs (Popay et al., 2023). Communities in Control forms the basis of this article’s insights, as it was the main cost-benefit analysis of Big Local. 

Between 2014 and 2022 researchers from the Communities in Control study studied the relationship between collective control and health in Big Local. Understanding the value of a complex and socially situated programme such as Big Local is not simple. Reflecting this, the evaluation covered more than a cost-benefit analysis. It measured population-level outcomes; the development of different forms of power; and the health and wellbeing of those actively involved in Big Local. However, this article focuses solely on the economic evaluation of the Communities in Control study, summarising the methodology and results.

The final report from the Communities in Control study was peer-reviewed and published in the Public Health Research journal. 

Local Trust has discussed the Communities in Control study’s exploration of population-level outcomes and the impact on those actively involved in other articles.

The study involved a cost-benefit analysis to understand whether Big Local was good value for money. This meant calculating whether the costs associated with the programme were greater or smaller than the benefits. Cost-benefit analyses often incorporate measurable benefits like direct cost savings, productivity gains, and gains around health and wellbeing (OHD, 2020). In this case, researchers drew on an element of the study which measured life satisfaction. Their methodology followed a peer-reviewed method used to measure the impact of the 2012 London Olympics on wellbeing (Dolan et al., 2019). 

According to the study, Big Local increased life satisfaction by 0.01 at a population level (on a scale of zero to 10), based on Annual Population Survey data (Popay et al., 2023). A monetary value was then assigned to this increase in life satisfaction, by comparing the impact of Big Local on life satisfaction to the impact of an increase in household income on life satisfaction (again, following the methodology in Dolan et al., 2019). The costs of Big Local included the value of the time that residents and other people volunteered (using data from Local Trust’s partnership members survey), as well as the Big Local funding that areas received (Popay et al., 2023). 

While the increase in life satisfaction was not significantly different from zero in statistical terms, the economic evaluators judged it sufficient to get an idea of the potential monetary value of the programme. And it is remarkable that for those Big Local areas who had spent more than 80 per cent of their grant by the 2019 to 2020 financial year, the impact increased by almost five times and became statistically significant. 

Some benefits and costs were not included in the study. For example, the study could not include the monetary benefits of any long-term impact on physical health, as it ran from 2016 to 2022.

The results of the study suggested that the overall net benefit of Big Local was positive in economic terms. The most conservative estimate suggested that the benefits exceed the costs by £64m, while the initial estimate calculated that the benefits could exceed the costs by as much as £150m.

Various tests were carried out to check the robustness of the results, which suggested that the net benefit of Big Local was positive in almost all scenarios. For example, some tests used larger cost estimates – one included funding committed to areas but not yet distributed, and another tripled the value of volunteer time instead of doubled. In yet another, the total annual Local Trust expenditure (from annual reports) was used, rather than the funding payments that each area received. Overall, the net benefits remained positive in these scenarios.

One robustness test considered the possibility that the estimated impact on life satisfaction of 0.01 was an overestimate. This was unlikely as the study included Big Local areas with (at the time) varying levels of spending – the areas had spent between 30 per cent to 80 per cent of the Big Local funds. So, it was perhaps more likely to be an underestimate in the long-term. Nevertheless, for robust testing, the calculations were repeated with a lower estimated impact on life satisfaction. The net benefit remained positive until a very low estimate of impact (0.004 or less). And looking at each area, in nearly all areas the net benefits were positive (lower monetary benefits were due to larger household sizes and lower incomes, where the beneficial impact of the increase in life satisfaction is diluted).

Combining the potential benefits of all 150 Big Local areas, the most cautious estimate suggested a 30 per cent rate of return on the original Big Lottery Fund investment. While there were limitations to the calculations used and regarding the timescale of the study, this is a promising base upon which future economic evaluations of community-led change could build. 

Thanks to the study’s lead economist Katharine Janke and overall lead Jennie Popay for providing detailed insight on the methodology; and to Jack Loughnane for input and comments on a previous version of this article.